California Eminent Domain Report

I received an interesting email last week about possible claims against a neighboring property owner who was taking steps in an apparent effort to lower the amount of compensation the agency would have to pay for the property.   I didn't get much in the way of details, but it did get me thinking about how (and why) this might occur, and what someone could do about it.

The first thought that occurred to me is why would a neighboring property owner want to cause the value of property to be lower?  It seems that in most circumstances, the last thing one owner would want is for a low value to be established for a neighboring property.   The most obvious reason is if the property is being acquired for redevelopment purposes, and the neighboring owner hopes to be the developer.   In this instance, the neighbor has a financial stake in establishing the lowest possible value.

The next issue is how does one go about devaluing a neighbor's property?  In the example given to me, the neighbor was making loud allegations about massive contamination issues on the property.  Since the costs of cleaning up contamination can be offset against the value of the property, this could have a major impact on what the agency pays for the property.

The question, then, is what can the owner do to protect against such conduct, and is the neighboring owner somehow liable in the eminent domain action.  The simple answer, I think, is that there is little the owner can do with respect to the neighbor in the context of the eminent domain action itself.

False Allegations:  If the allegations of pollution are false, the owner may need to hire experts to disprove the allegations if there is any risk that the allegations will be presented to the jury.  But it may also be possible to keep such unsupported allegations from the jury; unless there is some support for the allegations, it would seem they should be inadmissible.  Even if the claims ultimately do not impact value, it could be time consuming and expensive to rebut them.

True Allegations:  If the allegations are true, the owner has an even larger problem.  It may be that the contamination would have been discovered anyway, but perhaps not.  And with a vocal neighbor making claims, it seems safe to assume the agency will do an investigation and discover what is there.

Remedies Outside the Eminent Domain Action:  If the neighbor is making false accusations, the owner may have tort remedies.  In particular, liability may exist under a slander of title theory.  The basic elements are:

1. A published statement that disparages a person's title;
2. The statement is false;
3. The statement is made with malice; and
4. The statement results in special damages.

Typically, slander of title claims arise where a person falsely claims an ownership interest in property, but disparaging remarks about the property itself can also qualify.

Of course, if the statements were true, there can be no slander of title claim, so this only helps if the neighbor is lying about the property's condition.  If the allegations are true, I'm not aware of any remedy the owner has.